00:01
Here, when bonds are issued at a premium, in this case, bond 4, 105, the cash received is higher than the face value of the bond.
00:11
The premium is the difference between the issued price, which is 105 % of the face value in this case, and the face value.
00:20
The premium will be amortized over the life of the bond, which means that a portion of it will be recognized as interest expense each year.
00:29
So, the journal entry to record the sale of this bond on january 3, 2023, would be the cash account, which is the big one, 2835, 2 ,835, which is 105 % of 2 ,700 ,000.
01:14
And the chinese would credit premium on bonds payable account, who credit premium, this is 135 ,000.
01:41
Premium amount minus the difference between cash received and the face value.
01:48
And the card credit bond payable account, face value of the bond, which is 7, 2 ,700 ,000...